Annual Financial Statements 2015/2016

This year, for the first time, the financial statements have been prepared in accordance with Financial Reporting Standard 102 (FRS102), the new UK Financial Reporting Standard, and the revised Statement of Recommended Practice: Accounting for Further and Higher Education (2015 SORP). It is important to note that the underlying financial performance of most universities has not changed, the change is to the way the financials are reported.

These new financial reporting requirements have resulted in significant changes to the presentation of the Financial Statements, changes to accounting for pensions and may also result, going forward, in greater year-on-year volatility in income and expenditure over and above any changes arising from operational factors. Following the change in accounting for pensions and the volatility in discount rates the deficit for the year in 2015/16 includes an additional non-cash pension charge of £2.2m (2014/15 £1.1m).

Details of the changes in the Financial Statements, financial performance and financial position of the University as a result of these changes in financial reporting requirements are provided in Note 31 ‘Transition to FRS 102 and the 2015 SORP’.

New reporting arrangements aside, in the last year 2015/16, when the University completed a £32m building investment initiative on our Glasgow campus, the University recorded an operational deficit of £2.7m. The University financial provision nevertheless remains healthy with a strong cash at bank holding and measures in place to recover our financial position over the next two years.

Finally, the University would caution against comparisons between universities which are otherwise similar in size and type, as they may have different pension arrangements and have adopted alternative accounting policies.